Regulatory Choose Your Own Adventure
Pick one:
Rideshare (e.g. Uber, Lyft, etc.) drivers remain contractors. Drivers are financially exploited but get to choose when and where to work.
Rideshare drivers become exploited employees who don’t earn a living wage but get some benefits and have to work when and where the company tells them. The services become significantly more expensive.
Rideshare drivers become employees who earn a living wage but have to work when and where the company tells them. Only the wealthy can afford to use the services. As a result, far fewer drivers are needed and most drivers need to find other work. Ridesharing services are only offered in communities with enough wealth to keep them busy.
No more rideshare. Drive yourself or take a taxi. A million+ drivers need to find a new way to earn money.
There’s a fifth option potentially on the horizon. It’s not a viable option yet but as soon as it is, we’ll have very little choice about the matter:
5. Self driving cars take the place of rideshare drivers (and most other drivers). Millions of Americans need to find a new way to make a living. Rideshare services become extremely affordable.
Uber and Lyft have been operating at a loss since their inception. The idea that they could make rideshare drivers employees who earn a living wage is a fantasy without also incorporating major structural systemic change throughout the government. Uber and Lyft’s business model is simply not compatible with the goals that we might like to see regarding making drivers employees. Uber is expecting that option 5 above will render the entire debate moot at some point in the near future.
If you were in charge of regulating ridesharing services which option (1-4) would you choose? Alternately, suggest a different alternative that you think is economically viable.